Planning Commission Approves Plan To Curb "Predatory Lending"

Monday, January 12, 2015
Mayor Andy Berke speaks with Brainerd residents at the Krispy Kreme on ways to curb check cashing businesses
Mayor Andy Berke speaks with Brainerd residents at the Krispy Kreme on ways to curb check cashing businesses
The Planning Commission on Monday approved a new zoning tool that Mayor Andy Berke said was aimed at "decreasing the concentration of businesses engaged in predatory lending that negatively impact families, neighborhoods, and our city as a whole."
 
City County members Carol Berz and Russell Gilbert spoke in favor of the plan that next goes to the council.
 
It would use zoning to limit check cashing, title loan and pawn shop firms.
 
When the zoning is in place, a new such establishment would not be able to be located within a quarter mile of the last one to go in and not within 500 feet of a residential area.
 
The mayor's office said, "Several constituents have expressed their concern of this issue and we have invited some of those concerned individuals to discuss the proposed legislation with Mayor Berke, prior to Monday’s Zoning Commission."
 
He met with a group at the Krispy Kreme. One person said such establishments "are addictive. They pull you in and before long you can't get out."

 

Another said such firms "crowd out small businesses and drive up the cost for new startups."

One woman said a 24/7 cash checking place has opened on Brainerd Road at Germantown.

“Businesses engaged in predatory lending practices, like payday lenders and title loans, promise quick cash but deliver high debt,” said Mayor Berke. “Not only do these businesses negatively impact individuals and families, when located in a concentrated area they cause serious harm to the surrounding neighborhood and our city as a whole.”

 

“My constituents have been very vocal about this issue over the last few years,” said Councilwoman Carol Berz. “From a decrease in property values to an increase in crime, residents are worried about what these cash advance businesses are doing to our community. It’s time we put the right solution in place.”

 

“As city leaders, we have a responsibility to do everything in our power to address issues that harm our citizens and community,” said Councilman Gilbert. “Having a high number of these businesses detracts from our neighborhoods, impacting our sense of pride as well as the number of visitors and new businesses interested in the area.”

 

Meredith Broyles of Check into Cash asked that the resolution be delayed, saying her firm could work with the city on possible controls on signage and look of the business. She said the industry "is contracting, not growing."

 

She said the plan would allow landlords "to say 'Hey, you're stuck here' and jack up the rates. Then we're in a pickle."  

 

Here is the resolution:

A RESOLUTION TO AMEND CHATTANOOGA CITY CODE, PART II, CHAPTER 38, ZONING ORDINANCE, ARTICLE II, SECTION 38-2, DEFINITIONS AND ARTICLE V, DIVISION 13, SECTION 38-185; DIVISION 14, SECTION 38-205; DIVISION 15, SECTION 38-224; DIVISION 16, SECTION 38-246, USES PERMITTED AS SPECIAL EXCEPTIONS BY THE CITY COUNCIL; DIVISION 17, SECTION 38-266, PROHIBITED USES AND STRUCTURES; AND ARTICLE V, DIVISION 18, SECTION 38-289, USES WHICH REQUIRE A SPECIAL PERMIT; AND ARTICLE V, DIVISION 19, SECTION 38-303, USES PERMITTED AS SPECIAL EXCEPTIONS BY THE CITY COUNCIL; AND ARTICLE V, DIVISION R-4, SECTION 38-125, PROHIBITED USES AND STRUCTURES; AND ARTICLE V, DIVISION 10, SECTION 38-134, GENERAL FUNCTION (PERMITTED USES); AND ARTICLE VI, DIVISION 2, SECTION 38-529, SPECIAL EXCEPTION PERMIT FOR ALTERNATIVE FINANCIAL SERVICES ESTABLISHMENT.

WHEREAS, pursuant to Title 45 of Tennessee Code Annotated, certain rules and regulations governing financial institutions have been established which regulate pawnbrokers,  title pledge lenders, deferred presentment services, check cashers, and other similar uses which are considered as non-banking institutions; and

WHEREAS, the Regional Planning Agency completed a study of alternative financial services and referred a Planning Commission resolution at the request of City Council in 2006; and

WHEREAS, the study noted that efforts to promote economic revitalization through diversification of land uses in certain areas may be impeded by the clustering of certain alternative financial services; and

WHEREAS, the office of the City Mayor has requested the assistance of the City Attorney and Regional Planning Agency to review and update the 2006 Planning Commission resolution for City Council adoption by ordinance; and

WHEREAS, it is the determination of the Regional Planning Agency that the following uses should require a Special Exceptions Permit within the allowed zones; and

NOW THEREFORE, BE IT RESOLVED, that the Chattanooga-Hamilton County Regional Planning Commission on January 12, 2015, does hereby recommend to the Chattanooga City Council that the Chattanooga City Code, Part II, Chapter 38, Zoning Ordinance, be amended as follows:

Amend Article II, Section 38-2, Definitions, by adding a new definition in alphabetical order as follows:

“Alternative Financial Service” means establishments that are:

(a)        not licensed by an appropriate state or federal agency as a bank, savings and loan association, or credit union, industrial loan and thrift offices, insurance premium finance companies, or mortgage companies;

(b)        regulated by the Tennessee Department of Financial Institutions; and

(c)        categorized for purposes of this Ordinance as:

1)         “Pawnbrokers” as defined at T.C.A. § 45-6-203; or

2)         “Title Pledge Lenders” as defined at T.C.A. § 45-15-103; or

3)         “Deferred Presentment Services” as defined at T.C.A. § 45-17-102; or

4)         “Check Cashers” as defined at T.C.A, § 45-18-102 except that Check Cashers do not include Check Cashers exempt from state regulation pursuant to T.C.A. § 45-18-103, or

5)         any combination of Alternative Financial Services which include, but are not limited to, “Pawnbrokers”,  “Title Pledge Lenders”, “Deferred Presentment Services” and/or “Check Cashers” as defined herein.

Amend Article V, Division 13, C-2 Convenience Commercial Zone, Section 38-185, Uses permitted as special exceptions by the city council, by adding new subsection (4) Alternative financial services.

Amend Article V, Division 14, UGC Urban General Commercial Zone, Section 38-205, Uses Permitted as Special Exceptions by the City Council, by striking the section and inserting in lieu thereof the following:

(1)        The following uses may be permitted as special exceptions by the City Council as authorized by Tennessee Code Annotated, 57-3-208 and Chattanooga City Code, Part II, sections 5-101 through 5-126:

(a)        Liquor stores;

(b)        Wineries, including vineyards, processing, bottling and sales facilities; and

(c)        Alcohol Distillery, Small to the UGC Urban General Commercial Zone. 

(2)        Alternative Financial Services.

Amend Article V, Division 15, C-3 Central Business Zone, Section 38-224, Uses permitted as special exceptions by the city council, by adding new subsection (3) Alternative Financial Services.

Amend Article V, Division 16, C-4 Planned Commerce Center Zone, Section 38-246, Uses permitted as special exceptions by the city council, by adding new subsection (3) Alternative Financial Services.

 



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